FOX cuts new distribution deal with affiliates

April 17, 2006

FOX Television has signed a six-year deal allowing its 150 affiliates to share in the revenue from alternative distribution of its television programs.

It is the first major agreement announced to address the increasingly testy relationship between networks and affiliates over alternative new non-broadcast outlets-including the Internet and iPods — for the distribution of television content.

The agreement, whose details have not been confirmed by the parties, allows FOX to make 60 percent of its primetime schedule available online the morning after the shows air, the Wall Street Journal reported. The formula is complex, but stations essentially will get a 12.5 percent cut after costs when a show is distributed to alternative media platforms.

FOX, owned by News Corp., will initially be allowed alternative distribution of six hours of programming. That will climb to 100 percent of its primetime schedule by the third year of the contract. As part of the deal, the stations agreed to continue to help pay a portion of the $713 million FOX must pay the National Football League each year under its contract.